South Korea's KOSPI jumped more than 2 percent early on Sept. 22 and climbed above 7,100, but gave up most of the gain to end trading around 7,000. Buying poured in after the open, supported by strength in U.S. artificial intelligence and semiconductor shares overnight. Gains faded in the afternoon as institutions turned net sellers and large chipmakers moved in different directions.

The KOSPI closed up 10.19 points, or 0.15 percent, at 7,017.91. The index opened up 153.89 points, or 2.20 percent, at 7,161.61.

It kept trimming gains after the morning and fell as low as 6,986.27 during the session, briefly slipping below 7,000. It later recouped part of the loss and finished just above 7,000.

Foreigners were net buyers of 76.2 billion won. Retail investors expanded selling from 371.5 billion won early in the session to net selling of 1.61 trillion won.

Among top market-cap stocks, the early strength in semiconductor shares turned mixed. Samsung Electronics ended up 0.91 percent at 276,500 won. SK Hynix closed down 1.50 percent at 1.84 million won.

Samsung Electro-Mechanics rose 3.99 percent to 1.486 million won. SK Square gained 0.53 percent and Hyundai Motor rose 0.42 percent.

LG Energy Solution fell 0.43 percent, Samsung Biologics slid 0.78 percent, KB Financial Group dropped 1.01 percent and Samsung C&T slipped 0.14 percent.

The KOSDAQ failed to hold early gains and ended lower. The index fell 1.89 points, or 0.23 percent, to 834.38.

In Seoul's foreign exchange market, the won rose to 1,360.90 per dollar, down 14.10 won from the previous session.

South Korean stocks started strong by reflecting an overnight rally in U.S. AI and semiconductor shares. On Sept. 21 local time, the Nasdaq index rose 2.26 percent and the Philadelphia Semiconductor Index gained 4.29 percent. Meta jumped 11.43 percent and AMD surged 9.95 percent, drawing early buying into South Korean semiconductor shares.

Profit-taking and wait-and-see sentiment ahead of the Chuseok holiday prevented the market from sustaining the opening rally. In particular, institutions switching to net selling and SK Hynix turning lower during the session contributed to the narrowing rise in the index.

Han Ji-young (한지영), an analyst at Kiwoom Securities, said there was room for the index to fall below 7,000 again over the remaining 2 trading days this week due to short-term profit-taking and wait-and-see sentiment ahead of the Chuseok holiday. She said that considering the index's downside resilience, earnings and valuation, it is necessary to place more weight after the holiday on a move that raises both the low and the high within the existing range.